Diagnosing pricing issues

Newish news on the adherence beat indicates that patients are not so much refusing medication as looking for ways to reduce the impact of high prices. Among the latest findings are numbers from the Centers for Disease Control showing that adults between the ages of 18 and 64 were twice as likely not to have taken medication as prescribed because they wanted to save money as were adults 65 and over. Additional strategies for coping with high prices included asking for lower-priced medications and using alternative therapies.

Dismissing this as a pre-healthcare reform problem would be wrong, particularly in light of an April 8 advocacy letter sent to HHS, Treasury and the Department of Labor that indicates the out-of-pocket cap for privately insured patients has a loophole which could end up increasing a patient's tab from $6,250 to $12,500 per year. Signed by groups including the American Cancer Society, Cancer Action Network, AARP, American Diabetes Association and Community Catalyst, the writers note that ACA policy FAQs show that the cap is linked to the number of plan administrators, and each admin could “maintain separate and independent limits.”

Even out-of-pocket limits may not cure cost-related adherence issues. A study published in the April issue of Health Affairs notes that Americans pay more money for medications than patients in the Organization for Economic Cooperation and Development. This crew of nations includes Australia, Canada, France, Germany, Switzerland and the United Kingdom. Accounting for exchange rate fluctuations, the differential between manufacturer and retail prices and for pricing discounts as much as possible, Panos Kanavos and his fellow researchers found that Americans outspend their peers across the board, even when drug use increased in other countries. The findings were based on prices in 2005, 2007 and 2010 for drugs—biologics and traditional alike—that accounted for 37% of prescription drug spending in 2010, 29% in 2007 and 24% in 2005. One reason for higher US costs is that without a force like the UK's NICE, the American marketplace tends to adopt newer, pricier medications earlier.

Yet this isn't the whole story, particularly in light of the CDC's finding that patients are actively looking for ways to cut medication expenses. While per-capita prescription spending rose in all countries over the course of this study, spending in the US rose the most. More recent proof of this trend is in the April 10 research note by Bernstein analyst Tim Anderson which notes that while unit growth has been falling since 1999, “US sales growth, however, generally continues to come in ahead ... because of healthy price increases that the industry continues to take.” Anderson also notes that “pricing generally holds flat at best” outside the US.

Researchers also found that the US had “the largest price increases for older products” even though use of older drugs was lower in the US than in other countries.